From June 2014 new regulations apply to everyone who:
- sells to consumers ( as opposed to businesses)
- without meeting face to face e.g. sells online or over the phone ( so- called “Distance Contracts”) or door- to -door ( so-called “off- premises contracts”)
Previously the Distance Selling regulations applied but they have now been overtaken by the Consumer Contracts Regulations which impose a number of additional steps sellers must take otherwise they face criminal charges, shut down orders and bad publicity! The purpose of the law is to provide consumers with more transparency on who they are actually dealing with, what they are buying and alerting them to the fact that they may change their mind once they have clicked on ‘BUY’!
“If only it were this simple!”
In a nutshell the obligations mean that a trader must:
- Provide so-called ‘pre-contract’ information i.e. information about the service or products before the customer is committed to buying the service or products AND
- Provide certain information after the contract is concluded
What ‘pre-contract’ information must be provided?
- Key information about the identity of the trader and the products and many other things too many to list here
- If the consumer has a right to cancel, a Model Cancellation Form which must follow the set format specified in the Regulations. The consumer does not have to use it, but the trader must nevertheless provide it!
Note that failure to provide this information is a criminal offence so you need to act now to make sure you comply! There are additional penalties too: your customer’s right to cancel is extended and you will have no right to charge them for the use of the service or products up to the point that they cancel.
When and how must you supply the pre-contract information?
The trader must give the pre-contract information and cancellation form before the consumer is bound by the contract- so in practice any time before they are committed e.g. by clicking on ‘Buy Now’ or other button or if contracting over the phone, any time before they place their order.
The trader can give the pre-contract information and Model Cancellation Form to the consumer by either of the following methods:
- On paper
- If the consumer agrees, on another “durable medium” e.g. e-mail
What information must be provided once the contract has been concluded?
The trader must give the consumer one of the following:
- A copy of the signed contract.
- Confirmation of the contract.
The copy or confirmation must be provided within a “reasonable time” after the contract is formed, and in any event no later than the time of delivery of any goods or before performance begins of any service.
By what means must you provide the information?
By good old fashioned paper letter or by email. Note that the email must set out the full terms and you cannot simply send an email with a link to your terms. This is because the idea is that there is a record of what has been agreed that cannot be altered at a later date. If you just provide a link, the terms at the end of the link could be altered at some point in the future.
Where do you start????
We know you are a busy entrepreneur and news of these new laws and obligations is probably the last thing you need or have time for, so we have done the work for you.
Just 3 easy steps :
- E- mail us for our free questionnaire to see if you comply with new law. It will only take 3 minutes and will reveal if you do or not comply with the new law.
- If you don’t comply, turn to our ‘oven ready’ document shop which has brand new template for selling goods and digital products online which complies with new law. It has all of the relevant pre-contract information and model cancellation form.
- If you sell services, drop us a line or give us a call so that we can check your terms or provide you with fresh ones.
Alternatively, you can trawl through over 100 pages of the Regulations and work it out for yourself. Enjoy!!